Business confidence declined as the Stanbic IBTC Bank Purchasing Managers Index (PMI) was down from 50.1 in June to 49.2 in July falling below the 50.0 no-change mark for the first time in eight months and hitting a new record low.
The PMI showed that the Nigerian private sector moved back into contraction territory in July as steep price pressures hit demand and resulted in renewed reductions in both business activity and new orders.
PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration and the July index signalled a slight deterioration in business conditions as the second half of the year got underway.
Input costs and selling prices continued to rise rapidly, although there were some signs that efforts to secure sales resulted in a softer pace of output price inflation.
The renewed worsening in the health of the private sector mainly reflected the first reductions in output and new orders since November last year. Selling prices continued to increase sharply at the start of the third quarter as companies passed higher input costs through to their customers.
